Analysis of Stock Flow Diagram and Causal Loop Diagram
In chapter 3, the group discussed the causal loop and the stock flow diagrams. It has been noted that there are 5 feedback loops, 2 of which are positive and 3 of which are negative. The 2 positive feedback loops greatly reinforce the rate at which OFWs will return, and this is very much undesirable as they are our source of remittances. On the other hand the negative feedback loops, greatly bring down the supply of OFWs abroad. This presents a situation wherein the source of remittances that our economy so greatly relies on may be deminished.
In the following sections, DYNAMO was used to simulate the effects over time.
Assumptions of The System
Average remittances of each OFW is Php 17,593.29
Out of the total OFW population 2.55% leave their children behind
The number of applicants grow each year by 5%
The average rate of returning OFWs is 8% of the total number abroad
The average length each OFW stays abroad is 2 years
Initial values for the DYNAMO syntax of supply of OFWs is 900,000
Foreign Labor Opportunities grow by 10% each year
DYNAMO Syntax
NOTE OFWLVL is in Millions
L OFWLVL.K=OFWLVL.J+DT*(APPOFW.JK-RETOFW.JK)
N OFWLVL=900000
R APPOFW.KL=DELAY1((GRATE*1.1*OFWLVL.K),0.1)
R RETOFW.KL=DELAY1(((OFWLVL.K*(100/OFWDMD.K))+SOCCST.K+(RRATE*OFWLVL.K)),0.3)
C GRATE=1.05
C RRATE=0.08
NOTE OFWDMD is % Demand for OFWs
L OFWDMD.K=OFWDMD.J+DT*(NWFRJB-FFFRJB.J)
N OFWDMD=100
C NWFRJB=0.1
A FFFRJB.K=(1800000/(OFWLVL.K+RETOFW.KL))
A REMIT.K=17593*OFWLVL.K
A BROKFAM.K=0.02*OFWLVL.K
A CHILDLF.K=0.02*OFWLVL.K
A SOCCST.K=BROKFAM.K+CHILDLF.K
SPEC DT=0.1/SAVPER=0.1/LENGTH=20
NOTE Time is in Years
SAVE OFWLVL,OFWDMD,RETOFW,APPOFW,FFFRJB,REMIT
DYNAMO Graphs
Figure 4.1 - OFW Levels
Figure 4.2 - OFW Remittances
Figure 4.1 & 4.2 shows the results of the OFW Levels and their corresponding Remittances over time. It can be seen that over time, there will be a significant decrease in the number of OFWs abroad which can lead to unwanted consequences such as the reduced inflow of remittances.
Figure 4.3 - Application and Return Rate of OFWs
Figure 4.3 shows the results of Application and Return Rates for OFWs. From the figure, we can see that at around the 5th year there is a shift and that the return rate of OFWs becomes greater than the application rate. This shows the reduction in the number of OFWs from abroad.
Conclusion & Recommendation
From the observing the graphs, there is a clear problem that social costs may greatly affect the mindset of OFWs and prompt them to return. Like the solution to the "Limits to Growth" archetype the Philippine Government must find a way to reduce the social costs incurred by each worker or on the other hand find other countries. It must be the policy of the government to try and keep the OFWs sending their remittances as long and as much as possible.
CHAPTER 4 DATA ANALYSIS
Analysis of Stock Flow Diagram and Causal Loop Diagram
In chapter 3, the group discussed the causal loop and the stock flow diagrams. It has been noted that there are 5 feedback loops, 2 of which are positive and 3 of which are negative. The 2 positive feedback loops greatly reinforce the rate at which OFWs will return, and this is very much undesirable as they are our source of remittances. On the other hand the negative feedback loops, greatly bring down the supply of OFWs abroad. This presents a situation wherein the source of remittances that our economy so greatly relies on may be deminished.
In the following sections, DYNAMO was used to simulate the effects over time.
Assumptions of The System
DYNAMO Syntax
NOTE OFWLVL is in MillionsL OFWLVL.K=OFWLVL.J+DT*(APPOFW.JK-RETOFW.JK)
N OFWLVL=900000
R APPOFW.KL=DELAY1((GRATE*1.1*OFWLVL.K),0.1)
R RETOFW.KL=DELAY1(((OFWLVL.K*(100/OFWDMD.K))+SOCCST.K+(RRATE*OFWLVL.K)),0.3)
C GRATE=1.05
C RRATE=0.08
NOTE OFWDMD is % Demand for OFWs
L OFWDMD.K=OFWDMD.J+DT*(NWFRJB-FFFRJB.J)
N OFWDMD=100
C NWFRJB=0.1
A FFFRJB.K=(1800000/(OFWLVL.K+RETOFW.KL))
A REMIT.K=17593*OFWLVL.K
A BROKFAM.K=0.02*OFWLVL.K
A CHILDLF.K=0.02*OFWLVL.K
A SOCCST.K=BROKFAM.K+CHILDLF.K
SPEC DT=0.1/SAVPER=0.1/LENGTH=20
NOTE Time is in Years
SAVE OFWLVL,OFWDMD,RETOFW,APPOFW,FFFRJB,REMIT
DYNAMO Graphs
Figure 4.1 & 4.2 shows the results of the OFW Levels and their corresponding Remittances over time. It can be seen that over time, there will be a significant decrease in the number of OFWs abroad which can lead to unwanted consequences such as the reduced inflow of remittances.
Conclusion & Recommendation
From the observing the graphs, there is a clear problem that social costs may greatly affect the mindset of OFWs and prompt them to return. Like the solution to the "Limits to Growth" archetype the Philippine Government must find a way to reduce the social costs incurred by each worker or on the other hand find other countries. It must be the policy of the government to try and keep the OFWs sending their remittances as long and as much as possible.